Human services bill reduces many benefits for poor

04/21/2005

Jean Hopfensperger, Star Tribune
April 21, 2005

Welfare recipients living in subsidized housing would see $200 deducted from their monthly checks. Thousands of child-care providers wouldn’t get a scheduled rate increase for low-income parents’ child- care subsidies. And unspent welfare funds would be shifted to the state general fund instead of being used for poor families.

Those provisions are part of a House human services spending bill expected to be approved today by the Jobs and Economic Opportunity committee.. But dozens of Minnesotans urged the panel to change the plan at packed hearings Wednesday.

“Why is this committee, which is supposed to be about creating jobs and opportunity, bearing such a big share of the budget reductions?” asked Reggie Wagner of the Legal Services Advocacy Project.

The House plan would spend about $70 million less than the governor’s budget proposal in areas such as welfare, housing and child care. It does that by redirecting $33 million in welfare money available from 2004 to 2007 and $18 million in leftover child care subsidy funding, and generating $17 million from welfare recipients living in subsidized housing.

However, the plan would spend $6 million more on a popular housing program that encourages employers to build workforce housing. And it retains spending on housing programs for the poorest Minnesotans.

Committee Chairman Bob Gunther, R-Fairmont, said he sympathized with the dozens of people who have called his office to protest the cuts. “But I’ve got to work with the hand I was dealt,” he said.

The cut in welfare checks for parents receiving housing subsidies, and the child care changes, drew the most testimony. Welfare checks for recipients with housing subsidies now are reduced $50, and the proposal would increase the deduction by $150.

A $200 cut is an enormous blow, said Trishalla Bell, a former welfare recipient. A mother of two children gets a maximum welfare benefit of $535 a month.

“MFIP [the state welfare program] is supposed to be a program to get people a job and move out of poverty,” said Bell, a member of the Welfare Rights Committee “This budget contradicts its whole mission.”

The child-care changes drew widespread criticism. After losing $86 million in funding in 2003, including in direct subsidies to parents, child care would lose another $70 million under the House plan. The money would come from extending a 2003 freeze on reimbursement rates to child-care providers who accept families with subsidies. Those rates had been scheduled to increase this year.

Mary Vanderwert, director of child care programs for the Wilder Foundation in St. Paul, said a continued freeze on reimbursements rates would be devastating to child-care providers. “The rates have been frozen but our costs haven’t been frozen,” she said.

Meanwhile, Nancy Schouweiler, a Dakota County commissioner, was worried about the social service effect on counties. Counties weathered a $25 million cut in social service block grants in 2003, she said, and that was supposed to be restored this year.

Sue Rynda, social services director for Le Sueur County, said she was pleased that the budget continues funding for the homelessness prevention project, but worried about the effect of welfare cuts. “To give on one hand, and take away with the other, is not a hand up,” Rynda said.